How it Works

Business Loans Scotland offers gap funding up to a maximum of £100k to small and medium sized enterprises (SMEs) within our geographic area of operation where public sector funding (including Business Loans Scotland’s contribution), would not exceed 50% of the total funding package.

Up-Front Payment and Advanced Fee Fraud

Business Loans Scotland is aware of an Advanced Fee Fraud using our name or initials “BLS”. This Fraud induces individuals into believing they are applying for a fast loan but before an individual receives the loan they are told they must pay an upfront fee. Once the fee is paid, the victim does not hear from the company again and the loan is never received.Business Loans Scotland does not ask a Borrower for any fees up-front and any promise of this type of loan requiring an up-front fee is a CON.If a fraud has been committed, please report it immediately to the Police.

Eligibility

We can support the following types of legally formed and trading businesses:

Limited Companies

Partnerships including Limited Liability Partnerships (LLP’s) with 4 or more partners

Our primary focus is on businesses engaged in the Business to Business (B2B) and Business to Consumer (B2C) categories.

Loans may be used for

working capital

purchase of plant and equipment

purchase of business property

Applicant businesses should demonstrate that they have explored all available funding options including personal funds and borrowings, bank funding (including factoring and asset finance) and the potential for equity from venture capitalists. Any business approaching Business Loans Scotland will receive support and advice from Business Gateway and local authority business support teams to help them reach this stage.

As a guideline, the following sectors are likely to be eligible for support:

Manufacturing

Service to manufacturing

Construction

Wholesale

Transport and Distribution

Software

Agriculture linked to farm diversification

Tourism & tourism infrastructure

Service based (providing they are not one of the sectors not normally eligible for support)

Each applicant will be required to demonstrate the additionality that their business/project will achieve at the local or Scottish economy level. Certain business activities which may not strictly adhere to the above sectors may be considered, including:

Restaurants which support the local tourism product

Retail activities in isolated settlements where there is no suitable alternative provider within the area or with a specific tourism focus

Specialist B2C activities where key skills could be lost (e.g. specialist florists)

Loan Terms

Loans are available to all eligible businesses who meet the above criteria whilst also demonstrating their commercial viability. The interest rate will be fixed at 6% for the term of the loan. The interest rate may be higher for new businesses with a poor credit rating and low levels of security. No other fees or charges will be applied. The maximum repayment period is 5 years, although 'capital holidays', up to 3 months, may be considered.

Each loan will be subject to a tailored loan agreement. This is a legally binding document that will be prepared after a loan is approved.

Business Loans Scotland reserves the right to seek any form of security as appropriate. This may include a Standard Security, a Bond and Floating Charge, a Personal Guarantee or any other form of security deemed suitable.

Applications of up to £100k are welcomed from limited companies, social enterprises and partnerships (including LLPS) of 4 or more partners. We can also support sole traders and partnerships of 3 or fewer partners with loans greater than £25k.